Medical marijuana law sponsors surprised Christie wants to impose sales tax on it

By Jan Hefler, Inquirer Staff Writer

Posted: December 04, 2012

A lawmaker who was influential in getting New Jersey's medical marijuana law passed said he was stunned by the Christie administration's announcement last week that the drug would be taxed.

State Assemblyman Reed Gusciora (D., Mercer), who spent five years gathering support for the bill before it was enacted in 2010, said the Treasury Department's rationale was jarring, given the history of the bill.

Because the law was silent on whether the 7 percent sales tax could be applied, treasury spokesman Andrew Pratt said the department had to find out the "legislators' intent" when they drafted it.

"The sponsors agree it was their intention to tax the sale of medicinal marijuana," he said.

But four of the five primary sponsors - including Gusciora - said they were never consulted. They also said in interviews they never expected the drug to be taxed nor did they believe it should be.

Prescription and over-the-counter medications are exempt from the sales tax.

"If you use medical marijuana as a pharmaceutical, then you shouldn't be taxed for it. . . . You don't punish a person who's terminally ill and needs the drug," Gusciora said.

State Sen. Nicholas Scutari (D., Union), another primary sponsor, has a different recollection.

He said that before the law was signed, there were "very brief discussions" about the potentially substantial revenue the state could reap by taxing the drug. He also said he had a "casual conversation" with the governor's counsel before the administration announced its decision to impose a tax.

Because the law he helped draft did not specifically grant marijuana a tax exemption, it would be subject to a sales tax, Scutari said.

For many of the 318 registered medical marijuana patients, the tax is one more sign of the administration's insensitivity to their plight. The law was enacted in January 2010, but the launch of the program has been delayed numerous times.

So far, no dispensary has opened.

"This is an insult to patients, after they have waited so long," said Ken Wolski, executive director of the Coalition for Medical Marijuana-New Jersey, an advocate for the patients. "It's clearly unfair. . . . If you want money from marijuana, you need to legalize it for recreational purposes, not tax people who are sick."

Gusciora recalled that when he first proposed a bill in 2004, he included a provision for a sales tax. He hoped the prospect of new revenue would sway legislators who otherwise were lukewarm to legalizing medical marijuana.

"I was immediately shot down," he said. Representatives from both parties told him taxing it would be a mistake because it could create concern in the state's strong pharmaceutical industry that its drugs might be taxed next.

Gusciora and Scutari were the sponsors of the earliest version of the medical marijuana bill, in 2005. Winning support was difficult; later, three others signed on as primary sponsors.

Scutari said legislators had engaged in "very brief discussions" about the potential revenue a tax on marijuana could bring. In the long term, he said, that amount could be significant.

But none of the other primary sponsors remembered any discussion of the tax before the bill was passed, and they said the administration didn't ask them what their intent was.

Asked about that, Christie spokesman Michael Drewniak said:

"It's been made clear to us by the sponsors that they intended that." He referred to Scutari and Declan O'Scanlon (R., Monmouth), a medical-marijuana advocate who was not among the five primary sponsors or the 15 cosponsors, as supporters of the tax.

"I don't recall any discussions about it," Whelan said of the tax issue. "I think the assumption was that this is medicine, and it would be treated as medicine. . . . You can't get it without a doctor's recommendation, and have to go to a well-controlled dispensary."